What happens if Skelmersdale house prices go down?


Particularly due to the lockdown, some potential buyers telling me they are concerned that house prices in Skelmersdale are going to fall.


This concern does rear its head fairly regularly, however it's gathered pace a little due to the current situation we all find ourselves in.


The truth is that house prices can and indeed do fluctuate, with periods of growth, periods of stagnation, and periods of falling house prices. And whilst it's tempting to get caught up in worrying about this, my advice is to simply, not to.


My guess is that you, like a lot of people, are in this for the long haul, and no matter what happens to house prices, unless you've bought a property for WAY below market value, the chances of you making big gains from selling, say, a couple of years after buying are very low.


You see, no matter what happens in the short term, house prices do generally increase over time. For example, if you'd bought your home in 2006, your home may have been worth less in 2008 following the crash, but I'd imagine that by now, your home would have considerably surpassed its 2006 value. In fact, it would have done that probably five or six years ago.


What I'm saying is that if you're buying a property you intend to MAKE your home, and you're not planning on moving for a few years, then I'd suggest your investment is safe. It's precisely why a lot of professional investors do invest in property - even in the worst property price crashes, you are still highly unlikely to lose all your money, and even so, any losses will generally correct themselves given time.


But I know you're worried about landing in negative equity (this is where your home is worth less than the mortgage you owe on it). There are two points to make here - firstly, if you're still able to make your mortgage payments, then the best advice is to simply ride it out, and in time you'll have the double effect of your mortgage balance being lower, because you've kept chipping away at what's owed, meaning you'll get back into a positive equity situation much sooner. Secondly, the obligations of mortgage lenders are now more sophisticated than they were even a few years ago. If you're in difficulty, and can't make your payments, they are obliged to be helpful and sympathetic if you speak to them about it, and they will generally work out a plan to help you. Believe it or not, repossession of your home is a measure of absolute last resort.


Do I think prices will fall? I don't, particularly. There may be some stagnation following the pandemic as we all find our feet again, but in my opinion, a total crash is not what the economists are talking about.


So my advice to you is, if you like a property and you're able to and want to buy it, then do consider going ahead. Even if prices do take a small, short term hit, history shows that the general trend is for house prices to continually increase, the effect of which is all the more pleasing when you see your mortgage balance falling.


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